The 'Apple of China' is selling a water purifier, and the reason is genius

Xiaomi, the $45 billion Chinese tech juggernaut sometimes
referred to as the "Apple of China," is releasing an unusual new
product: a water purifier.

It's a far cry from the low-cost smartphones and fitness bands
the company is best known for, which have propelled it from
nothing to become one of the world's most valuable startups in
just five years.

But when you think about it, it makes perfect sense.

Xiaomi has a young, highly passionate customer base — one that
will soon get older and begin to buy homeware and other
essentials of adult life. If Xiaomi can be there to provide them,
why would those customers look anywhere else?

What is more interesting, though, is what will happen when
[Xiaomi customer] Han and his peers finally do get places of
their own. They will need to buy TVs, and air purifiers, and all
kinds of (relatively) high [cost] goods. And which brand do you
think they will choose? If Apple can sell a battery charger to my
coworker, I'm pretty certain Xiaomi can sell an air purifier to
Mr. Han, and, sooner rather than later, just about everything he
needs for his new house.

Xiaomi has previously been accused of appropriating Apple's phone
designs: Apple head of design Jony Ive once went so far as call
such actions "theft." But the real reason Xiaomi is often
described as the Chinese equivalent of Apple is
the astonishing loyalty of its fans.

Xiaomi's fans, whose devotion is unprecedented for an Android
manufacturer, are the key to the startup's rapid growth. The
company spends almost nothing on marketing but has enjoyed a
meteoric rise through careful cultivation of its following. The
company holds flash sales for "Mi-fans," holds "festivals," and
even
throws parties in expensive nightclubs and holds giveaways
for its most devoted fans. Immediate sell-outs of new products
only add to the excitement.

In addition to devotion, another characteristic defines Xiaomi
customers: youth.
Research from Flurry in 2014 found that Xiaomi was far more
popular among the younger generation in its native China,
"especially college students and young adults who just entered
the workforce."

This is where the watercooler fits into all of this: It's all
about Xiaomi's long-term goals.

Its customer base's loyalty is well established and is now
entering the home-appliance market for the first time. The
startup is betting that if it can be there to provide in that
market, these customers will stick with it. "This, then, is the
key to understanding Xiaomi," Thompson writes. "They're not so
much selling smartphones as they are selling a lifestyle, and the
key to that lifestyle is MiUI, Xiaomi's software layer that ties
all of these things together."